Snap-on reported a mixed quarter with revenue down 0.6% to $1.18 billion, but operating deleverage in its auto repair vertical led to an almost 11% reduction in industrial operating profit to $248 million. EPS compressed almost 8% to $4.64 per share.
Snap-on manufactures premium tools, equipment, and diagnostics for professional technicians, primarily for passenger car repair, but it has expanded into other industrial applications. The company’s legacy business sells hand tools through franchisee-operated mobile vans, with technicians purchasing the tools at their own expense. The company also operates a commercial and industrial business that is focused on repair facilities serving other industries. The third segment, repair systems and information, targets auto OEMs and large dealerships more directly and also offers substantial diagnostic solutions to aid repairs. The company’s finance arm provides franchisees with financing to run their operations and underwrites end-customer purchases.